The latest quarterly Federal Reserve Z.1 "Flow of Funds" Survey was released last week, containing a number of tables relating to money market mutual funds. The 124-page Third Quarter 2008 edition shows that the largest investors in money market mutual funds continue to be the household sector, funding corporations, including securities lenders, and nonfinancial corporate businesses. There was surprisingly little change from the previous quarter.
Money fund assets held by the household sector increased by $41 billion to $1.452 trillion in Q3, representing 43.0% of the $3.377 trillion tracked by the Fed. This percentage is up 0.8% in the quarter, but down 1.6% over the past 12 months (even with a $202 billion increase). Household money fund assets as a percentage of money funds' total have steadily declined over the past 5 years as institutional assets have increased at a faster pace.
The second largest segment in the Fed's Z.1 Table L.206 "Money Market Mutual Fund Shares" was "Funding corporations," which are defined as, "Funding subsidiaries, nonbank financial holding companies, and custodial accounts for reinvested collateral of securities lending operations." This segment decreased by 0.3% to 21.5% of assets, declining $2 billion to $726.8 billion. Securities lenders and other funding entities have increased their share of money funds' total assets by 3.6%, or $224.4 billion over the past year, and these assets have more than doubled since yearend 2006, when they totalled just $311.3 billion.
Nonfinancial corporate businesses represent the third largest money fund investors demographic with $618.0 billion, or 18.3% of all assets. Assets here decreased by $6.9 billion in Q3 and increased by $96.9 billion over 12 months. Life insurance companies hold $244.8 billion (7.3%) in money funds; Nonfarm, noncorporate businesses hold $102.3 billion (3.0%); Private pension funds hold $95.3 billion (2.8%); and State and local governments hold $83.2 billion (2.5%). The Fed also lists "Rest of the world" at $38.9 billion (1.2%) and "State and local government retirement funds" with $15.2 billion (0.5%).
The Fed's Z.1 series, which also contains tables of "Total financial assets" held by money market mutual funds, shows total money fund assets increasing by $33.3 billion, or 1.0% in Q3, and increasing by $576.6 billion, or 20.6%, over the past 12 months.
